#### SOUTHERN STOCK FIRE INSURANCE COMPANY OF GREENSBORO v. RALEIGH, CHARLOTTE AND SOUTHERN RAILWAY COMPANY, and NORFOLK SOUTHERN RAILWAY COMPANY.

(Filed 10 March, 1920.)

1. Actions — Consolidation—Insurance—Negligence.

Several insurance companies having commenced their separate actions against the same defendant for negligently setting fire to and damaging or destroying the lumber of the same insured; Held, the Court has the power, upon motion, to consolidate the several actions into one, and to make the insured a party under the authority of Ins. Co. v. R. R., ante, p. 255.

2. Actions— Negligence — Insurance—Damages—Payment—Subrogation— Indivisible Actions — Agreement of Parties — Pleadings—Acquiescence —Demurrer.

The insured commenced action against a railroad company for its alleged negligence in damaging or destroying his lumber by fire, claiming such only as he' had not received from the insurer, the total loss being in excess of that amount, and this insurer and others insurers of the same property brought separate actions, on the same day, each for the amount of this loss they had paid, under their several policies, to the same owner. Held, while such cause of action is. ordinarily indivisible as between the insurer and insured against the tort feasor, the insured holding the'title in trust for the insurer to which the former is entitled to subrogation to the rights of the latter, upon the payment of the loss sustained to the extent of the policy, these causes can be divided by the agreement or act of the parties, and it appearing that the plaintiffs have accordingly filed their pleadings, against the defendant for the same tort, the insured to recover the excess of his loss over the policies paid to him, thus dividing the action, and the defendant has answered to the merits instead of objecting to this division by plea or motion, it must be held to have acquiesced in and assented thereto. Powell v. Water Company, 171 N. C., 290, cited and applied.

Appeal by plaintiffs from Connor, J., at tbe November Term, 1919, of HARNETT.

This is an action by an insurance company to recover tbe amount of. tbe insurance paid by tbe plaintiff to tbe Elm City Lumber Company on account of loss by fire alleged to have been caused by tbe negligence of tbe defendant.

1. On 11 November, 1912, a fire occurred wbicb destroyed lumber owned by tbe Elm City Lumber Company, amounting in value to upwards of $20,000.

2. On 3 December, 1914, tbe Elm City Lumber Company and N. McLaughlin commenced an action against tbe defendant, returnable to tbe January Term, 1915, tbe plaintiffs therein suing for $8,165.83, $4,971.12 of wbicb was claimed by N. McLaughlin, and $3,194.71 by tbe Elm City Lumber Company.

*2913. At tbe January Term, 1917, during tbe trial of tbe McLaughlin-Elm City Lumber Company ease, wbicb is reported in 174 N. C., p. 182, tbe plaintiffs therein were allowed to file an amended complaint, in wbicb is set up tbe amount of insurance wbicb bad been paid to tbe Elm City Lumber Company, to wit, $11,678.49, by several -insurance companies; and tbe plaintiffs also, in said amended complaint of January, 1917, alleged tbat tbe total value of tbe lumber was a great deal in excess of $20,000, tbe total value of tbe lumber at tbe plant at tbe tinte of tbe burning being alleged to be greatly in excess of $22,000, and tbe unburned portion being alleged' to be of tbe value of $2,009.15.

4. At said January Term, 1917, tbe Elm City Lumber Company recovered judgment against tbe defendant for $7,500, and after appeal to tbis Court (174 N. C., p. 182), wbere'tbe judgment of tbe lower court was affirmed, tbe defendant paid said judgment in full.

5. At no time prior to tbe November Term, 1919, bas tbe plaintiff sought any relief except through tbe medium of its independent action.

6. Tbe summonses in tbis, and tbe other three insurance company cases, and in tbe Elm City Lumber Company case against tbis defendant, were all issued 3 December, 1914.

The actions by tbe other insurance companies were, like tbis, to recover insurance paid to Elm City-Lumber Company.

At November Term, 1919, tbe plaintiff in tbis action moved to consolidate all of tbe actions by tbe insurance companies, alleging tbat in tbe action by tbe Elm City Lumber Company against tbe defendant no recovery was sought or bad on account of tbe insurance paid, and tbat tbe damages assessed was tbe difference between tbe insurance and tbe value of the property.

Tbe judge was of tbe opinion tbat be bad no right to consolidate tbis case with tbe other three cases named, and refused to grant tbe motion made by plaintiff’s counsel. Tbe plaintiff excepted.

Tbe defendant then moved to dismiss tbe action on tbe ground tbat tbe complaint does not state a cause of action in tbat from said complaint it appears:

' 1. Tbat tbe title to tbe lumber destroyed by fire was in tbe Elm City Lumber Company.

2. Tbat tbe amount of insurance which plaintiff paid to said Elm City Lumber Company on account of said lumber destroyed was $2,975.75.

3. Tbat tbe value of the lumber destroyed was $20,000.

Tbis motion was allowed, and tbe plaintiff excepted and appealed.

Godwin & Williams, E. F. Young, and R. W. Winston for plaintiffs.

E. McD. Robinson and R. E. Simms for defendant.

*292Allen, J.

His Honor was in error in bolding tbat be did not bave power to consolidate tbe several actions brought by tbe insurance' companies. See Ins. Co. v. R. R., at tbis term, opinion by Walker, J., where tbe precise question is fully discussed and decided.

Tbe same case also bolds tbat tbe Elm City lumber Company may be made a party, _ and tbat tbis would not change tbe character of tbe action.

If, however, tbe lumber company is not made a party, we are of opinion tbe consolidated action may be maintained, although tbe loss exceeds tbe insurance, if, as alleged, and so far not denied, tbe parties bave in effect divided tbe action, and tbis follows naturally from tbe decision in Powell v. Water Co., 171 N. C., 290.

It was held in tbat case:

> “1. Tbat tbe right of action to recover damages from tbe wrongdoer is in tbe insured, and tbat tbis right of action is one and indivisible.

> “2. Tbat upon payment of tbe insurance tbe insurer is subrogated to tbe rights of tbe insured as against tbe wrongdoer.

> “3. Tbat if tbe insurance is equal to or exceeds tbe loss, tbis right of subrogation extends to tbe whole right of action in tbe insured, and operates as an equitable assignment, and tbe action may thereafter be prosecuted in tbe name of tbe insurer.

> “4. Tbat if tbe insurance is less than tbe total loss, tbe right of subro-gation still exists; but as tbe right of action is indivisible, and as tbe insurer has only paid a part of tbe loss, and is not entitled to an assignment of tbe whole cause of action, tbe action must be prosecuted in tbe name of tbe insured.

> “5. Tbat a release by the insured does not extinguish tbe right of subrogation.”

Also, tbat tbe insured is a trustee, first, for reimbursement of bis own loss in excess of ‘the insurance, and then for tbe insurer to tbe extent of tbe insurance paid, and tbe Court adds: “They (tbe authorities) also seem to establish tbe proposition tbat if tbe insurance is less than tbe loss, and tbe insured has settled tbe difference between tbe insurance and tbe total loss with tbe wrongdoer, leaving unsettled only tbe amount of damages, measured by tbe insurance, tbat tbe cause of action for this-damage would be in tbe insurer, for tbe reason tbat tbe insured has parted with all beneficial interest in tbe right of action, and, while the cause of action was indivisible, it has been divided by tbe act of tbe parties.”

Tbis recognizes tbe principle tbat while tbe right of action in tbe insurer is one cause of action, and indivisible against tbe will of tbe parties, it can be divided by tbe agreement or act of tbe parties, and it is also true tbat tbe rule against tbe splitting of causes of action is for *293tbe benefit of tbe defendant, for tbe purpose of protecting bim against a multiplicity of suits and unnecessary expense and costs, and may be waived by bim.

If-so, and it is made to appear tbat tbe Elm City Lumber Company, tbe insured, brought its action to recover its damages in excess of tbe insurance, and on tbe same day tbe insurance companies commenced tbeir actions against tbe same defendant to recover tbe amount of tbe insurance paid by tbem, thus dividing tbe action in so far as tbey were able to do, and tbe defendant, instead of objecting to tbis division of tbe action by plea or motion, answered to tbe merits, it must be beld to bave acquiesced in and to bave assented to tbe course taken by tbe several plaintiffs.

In Fort v. Penny, 122 N. C., 232, in wbicb objection was made in tbe Superior Court to dividing a cause of action in order tbat actions might be commenced before a justice of tbe peace, it was beld: “If tbe proofs bad shown as matter of fact tbat tbe two demands appearing in tbe two summonses were one and tbe same transaction, and therefore indivisible,” tbe defendant must file plea in abatement, and upon failure to do so tbe objection was waived, and upon tbe same principle tbis action may be maintained.

Reversed.